Channels and
Best Channel Structure for e-commerce

What are Channels?

Channels put the different ways people came to your site into buckets.

These buckets should align with the separate initiatives that drive visits to the site.

Channels help you work out how each initiative is working and what to do more or less of.

You can use channels to make it easier to group sessions, events, orders, sign-ups etc. on your site.

Channels are fundamental to being able to optimise your e-commerce store.

One key element of Channel Segmentation is to not mix paid and free visits in the same channel.

Allocating a session or event to a channel is straightforward – you simply see where the user came from for that particular session/event.

Allocating a channel to a conversion is harder as the user may have visited the site multiple times before purchasing and come via multiple channels. The framework for allocating credit to a particular channel based on the customer journey is called the ‘attribution model’.

Read more about attribution.

What’s the best channel segmentation?

There isn’t a definitive list of Channels.

Google Analytics now offers three channel segmentations:

• The original ‘Default channel grouping’ Google Analytics (Universal Analytics) – this version of GA will sunset in July 2023.
• A channel segmentation they use in their Attribution tool.
• A revised ‘GA4 Default channel grouping’ for their new GA4 web analytics tool

A comparison of the three channel segmentations is below:

We recommend the channel segmentation that is used in the GA Attribution Tool.

This splits out Paid Social (which the GA Default channel segmentation does not) and separates out Shopping and Paid Search Brand (both of which can behave very differently to Paid Search Generic and attract a different type of customer or awareness level of brand).

The GA4 channel segmentation is good also – you can use a tool like mapflo to sub segment paid into brand and non-brand for example.

 

Channel Definitions

This is a summary of what the different channels mean:

Make sure you separate out Paid Brand campaigns

If you are running specific Paid Brand Campaigns (bidding on your brand terms – such as your company name or one of your own brand product names) then make sure the word ‘Brand’ is in the campaign name so that costs from brand campaigns can be easily grouped and attributed – and critically separated from non-brand campaigns which will have a very different dynamic – and either treat these as a separate channel or roll into Organic or Direct. Don’t keep in the same bucket as other Paid Search campaigns!

Use UTM Parameters and consistent campaign naming convention

It’s really important that any visits from your paid campaigns accurately capture the Campaign Name, Source, Medium (and Ad Set mapped to Content for Facebook campaigns) using UTM Parameters.

Read how to set up UTM Parameters for Facebook and Google.

Make sure that your Campaigns are named methodically to capture key information about the audience and objective.

Read more about naming campaigns.

mapflo can help organise your channels

If GA4’s Default channel grouping is not right for you then mapflo can help re-assign sessions and conversions to your preferred channel segmentation (as well as use data from your ad platforms to perfectly segment you marketing spend data – providing more granularity around the type of paid campaigns driving sessions and purchases: category of product advertised, brand vs non-brand; purchase vs brand awareness vs lead gen).

 

>>> Read our step-by-step guide to optimizing Google Ads

>> Purchase an ANALYSIS OF YOUR GOOGLE ADS ACCOUNT

The interactive video below highlights some of the analyses we cover:

 

---

Please be really careful making changes to your Google Ads account

• Google doesn’t always respond how you (or we) think it will. The way we think about Google Ads may not be the best set-up for your account.
• Only change one thing at a time.
• If possible, always use an experiment to test a change – particularly for significant changes such as moving bidding strategy to Maximize conversion value (Target ROAS).
• Protect your financial downside by testing with limited spend in the experiment/change. Note that moving to a smart bidding strategy requires a learning phase where Google may not be efficient.
• Be careful if adding/removing primary conversion actions – changing what Google is converting to can radically change what and who Google targets and how much it’s willing to spend.
• Remember, all changes to your account are at your own risk. Mapflo shall not be liable for any damages; losses; lost revenue or lost profit.
  

 

---

Glossary of Terms

AOV = Average Order Value

CM1 = Contribution Margin 1 = revenue minus COGS (cost of goods sold) in an order.

CM2 = Contribution Margin 2 = margin on an order after all costs directly attributable to that order such as COGS, shipping, payment fees, customer service etc. (except for marketing).

CM3 = Contribution Margin 3 = CM2 less marketing spend. An ‘Estimated CM3’ value uses an assumed CM2 %.

CPA = Cost Per Action. In this report taken to mean cost per conversion or cost per order.

Keywords = words or phrases (assigned to an ad group) that match a user’s search term and trigger Google to bid to show an ad.

Lifetime CM3 = CM3 from all orders (or subscription payments) for a customer.

Profit = CM3 less all fixed overheads (such as salaries and office rent). Hence Optimising CM3 also optimises profit at the same cost base

ROAS = ‘Return On Ad Spend’ = conversion value divided by cost. A ROAS of 400% means you get four pounds of revenue back for every pound of ad spend.

Search term = the word or phrase that a user searches for on Google.

---